There are two ways you can get a high credit limit on your credit card:

a. The best way is to work towards a good credit score which typically leads to a high credit limit.

b. Alternatively, if you have a good track record, you can ask your bank for a higher credit limit on your card. If it has been sometime since your limit was increased, the bank might agree to a hike.

The main advantage of a high credit limit is that you have more flexibility in the amount you can spend on your credit card. However, a second advantage of a high limit is that it signifies that you are a responsible borrower and that credit card issuers find you sufficiently creditworthy to qualify for this limit. A high credit limit has a positive impact on your credit score and makes it easier to secure loans and credit cards on favourable terms in the future as well.

Ways to improve your score so you qualify for a higher limit on your credit card

It is advisable to have a credit score of 750 or above in order to secure the most favourable terms on your credit card. If you wish to have a high credit limit, start taking steps now to reach a score of 750. Here are some simple ways to achieve that credit goal: 

1. MAKE ALL CREDIT CARD AND LOAN PAYMENTS ON TIME: Your payment record is the most important factor in calculating your credit score and can form up to one-third of your score. It is very important to make sure that you make all payments on time and in full. Even a single missed or delayed payment can affect your score.

2. DO NOT EXCEED 50% OF YOUR CREDIT LIMIT: Consistently spending a large proportion of your credit limit is not a good idea as it signifies that you are in constant need of credit. For example, if your credit limit is Rs. 1 lakh, restrict your monthly spending to less than 50% of your limit i.e. Rs. 50,000. If you consistently exceed that amount, it reflects a lack of spending discipline and will negatively affect your score. The amount you spend as a proportion of your total credit limit is known as your credit utilization ratio. The lower your ratio, the better your chances of being given a higher credit limit.

3. AVOID APPLYING FOR MULTIPLE LOANS OR CREDIT CARDS IN A SHORT TIME PERIOD: If your loan or card application has been rejected once, do not make multiple applications to other banks to try and maximise your chances of success. Each time your application is rejected, it affects your score negatively. Wait to improve your score before you apply again.

Following these tips will help you build a healthy credit profile which will allow lenders to issue you a high credit limit on your card.